Overnight Recap 12/19

Opportunistic Trader Overnight Recap 12/19/2018

Top Headlines:

-FOMC Day! Markets await FOMC rate announcement at 2pm EST
-Oil traded down over 7% on Tuesday last $46.65.
-US/China plan January meeting on trade talk
-After market close FedEx wared of a global slowdown and slashed forecast (-6% this morning).


European stock markets were mostly firmer overnight, while Asian shares were mostly weaker. U.S. stock indexes are pointed toward higher openings when the New York day session begins, on a rebound after the indexes fell to new low closes for the year on Tuesday. Gold, the U.S. dollar and U.S. Treasuries have been supported recently by the wobbly and volatile U.S. stock market.

Focus today is squarely on the U.S. Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement. Many still expect the FOMC to raise interest rates by 0.25% this afternoon. However, the likelihood for a rate hike today has come into question after proclamations from President Trump, his closes economic advisors and noted market analysts and traders that the Fed should leave interest rates alone. Fed Chairman Jerome Powell holds a press conference after the FOMC statement. Look for active markets this afternoon, after the FOMC announcement.

Chinese economic and political officials are holding key meetings this week, at which major economic initiatives are being discussed and could be announced. China’s economy has been pinched this year by tariffs imposed by the U.S. on China’s imports.

It now appears less likely the U.S. government will shut down Friday, as reports say the Trump administration is likely to come to an agreement with Congress on a budget.

The key outside markets today see the U.S. dollar index lower on a further corrective pullback after hitting a nearly two-year high last week. Meantime, raw commodity sector leader Nymex crude oil prices are firmer on tepid short covering after careening to a 15-month low of $45.79 a barrel on Tuesday. There are still no early chart clues the crude oil market is near a bottom.

A heavy slate of U.S. economic data is also due out later this week, including the first estimate of third-quarter gross domestic product on Friday morning.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, international transactions and the current account, existing home sales, and the weekly DOE liquid energy stocks report.

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are firmer in early U.S. trading today, on a corrective bounce after hitting a new low for the year on Tuesday. Bears are in solid technical command. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Tuesday’s high of 2,577.75 and then at 2,600.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,530.00 and then at 2.500.00. Sell stops are likely located just below those levels.

March Nasdaq index December futures: Prices are firmer after closing at a new low close for the year Tuesday. Bears are in solid technical control. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Tuesday’s high of 6,577.50 and then at this week’s high of 6,656.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,455.50 and then at this week’s low of 6,423.25. Sell stops are likely located just below those levels.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are higher and hit a new contract high overnight. Bulls are in solid near-term technical control. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight contract high of 144 10/32 and then at 144 24/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 143 29/32 and then at 143 16/32. Sell stops likely reside just below those levels.

March U.S. T-Notes: Prices are higher and hit a new contract high in early U.S. trading. Bulls have the solid chart advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight contract high of 121.02.5 and then at 121.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 120.24.0 and then at Tuesday’s low of 120.19.5. Sell stops likely reside just below those levels.

U.S. DOLLAR INDEX

The March U.S. dollar index is lower again in early U.S. trading, on a downside correction after hitting a nearly two-year high last week. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 96.440 and then at Tuesday’s high of 96.645. Shorter-term support is seen at this week’s low of 96.155 and then at 96.000.

NYMEX CRUDE OIL

January Nymex crude oil prices are near steady after hitting a 15-monrh low Tuesday. Bears are in solid overall near-term technical control and have gained more power this week. There are still no early clues that a market bottom is close at hand. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $46.66 and then at $47.00. Look for sell stops just below technical support at Tuesday’s low of $45.79 and then at $45.00.
GRAINS

Grain futures prices were weaker overnight, led to the downside by wheat. Not much new this week. The grain market bears still have the overall near-term technical advantage. Grain traders are awaiting fresh U.S. export demand, including buys from China, as that nation had promised recently.